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Bank Industry Risk Analysis: Japan May 00
Standard & Poors, May 2000
Abstract
The Japanese financial sector is gradually moving toward recovery, benefiting from better economic conditions and improved market confidence. Japanese banks have made progress in identifying their problem loans and setting aside adequate reserves for expected losses. However, bank asset quality remains under pressure amid the protracted decline in domestic real estate prices and the deterioration of some heavily indebted borrowers. In fiscal 1999 (ended March 2000), aggregate credit costs at major banks, although down from the previous year, were still high at 1.3 times core profits. Credit costs in fiscal 2000 will likely offset about half of the banks' core profit. The industry's weak fundamentals have not changed significantly. The banks continue to struggle with low profitability and weak capital...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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